Acosta said Nov. 8 that it has reached terms with more than 70 percent of its lenders and more than 80 percent of its noteholders as a precursor to its prepackaged Chapter 11 filing.
The Jacksonville, Florida-based sales and marketing agency said the plan will eliminate all of its approximately $3 billion of long-term debt. In addition, investors are kicking in $250 million in new equity capital.
“This is a very positive development for Acosta and our employees, clients, customers and other business partners,” said Darian Pickett, CEO of Acosta, in a press release. “Through this strategic step, Acosta will be well-positioned, both operationally and financially, to make critical investments in our business and drive sales and market penetration for our clients and customers. Our business remains fundamentally strong, and we are pleased that our new investors recognize the long-term value Acosta can create for our clients and customers. We all are excited about what the future holds for Acosta.”
Under the reorganization plan, vendors will be paid in full for goods and services provided before and during the Chapter 11 process, and all employees can expect to receive their usual wages and benefits, the firm says.
“This process will enable us to continue to operate our business without disruption to clients, customers, employees and business partners,” Pickett said. “Our number one priority always has been to help drive long-term growth for our clients and customers and ensure they are well-equipped to succeed in the competitive consumer landscape. We look forward to doubling down on this commitment by reinvesting in our people and our capabilities across all retail channels.”
Acosta and its U.S. affiliates intend to file voluntary Chapter 11 petitions in the coming weeks. Its non-U.S. subsidiaries and affiliates are not expected to be included in the upcoming filing or affected by the Chapter 11 process.
Having already received support for the plan from a supermajority of both its lenders and note holders, the company expects to complete the restructuring process quickly.